Blackburn Inc. uses Otavalo Manufacturing and Piura Company to buy two precision machined parts used in the manufacture of its permanent-magnet motors: Part #625 and Part #827. Consider two activities: testing parts and reordering parts. After the two parts are inserted, testing is done to ensure that the two parts work as intended. Reordering occurs because one or both of the parts have failed the test and it is necessary to replenish part inventories. Activity cost information and other data needed for supplier costing are as follows: I.   Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Costs     Testing parts $4,500,000 Reordering parts 1,125,000 II.   Supplier Data   Otavalo Manufacturing   Piura Company                       Part #625 Part #827   Part #625 Part #827                 Unit purchase price $30 $78   $36 $84                 Units purchased 450,000 225,000   56,250 56,250                 Failed tests 4,500 2,925   39 36                 Number of reorders 225 150   0 0                                                                                                     Required: Determine the cost of each supplier by using ABC. Round unit costs to two decimal places.   Otavalo Manufacturing Piura Company Part #625 $ $ Part #827 $ $

An IE works in the automation department of a surgical equipment manufacturing company that produces specially ordered equipment for hospitals. To upgrade the quality of the assembly process of the camera used in laparoscopic surgery probes, two approaches are available: make and buy. The make alternative has an initial equipment cost of $175,000, a life of 5 years, a $25,000 salvage value, a processing cost of $3,000 per camera, and an M&O cost of $65,000. The buy alternative requires contracting the assembly operation externally at a cost of $6,000 per camera. If the MARR is 12% per year, how many cameras per year must be assembled to justify the make alternative?  cameras must be assembled per year to justify the make alternative.

James is considering replacing his worn-out machines. Which of the following is not a relevant cost for James when considering various available options? Select one: a. Changes in costs of labour needed to operate the new machines. b. Costs of acquiring the current worn-out machines. c. Costs of delivering the new machine. d. Costs of replacing old machines. e. None of the above answers is correct.

Harrington Manufacturing Inc. began operation 5 years ago producing the probo, a new type of instrument it hoped to sell to doctors, dentist, and hospitals. The demand for probos far exceeded initial expectations, and the company was unable to produce enough probos to meet that demand. Harrington was manufacturing probos on equipment built at the start of its operations, but it needed more efficient equipment to meet demand. The company management decided to design and build the equipment, because no equipment currently available on the market was suitable for producing probos.    In 2021, a section of the plant was devoted to development of the new equipment and a special staff of personnel was hired. Within six months, a machine was developed at a cost of $170,000that increased production and reduced labor cost substantially. Sparked by the success the new machine, the company built three more machines of the same type at a cost of $80,000 each. Required: In addition to satisfying a…